I need some insight from the experienced re: Insurance....

rhkennerly

rhkennerly

Pre-takeoff checklist
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rhkennerly
I'm a PPL thinking about buying an LSA (I'm still debating EAB kit or SLSA).

I need some guidance on two subjects: Financing and Insurance. I'll start a thread for each.

Insurance: I don't have a clue about how aircraft insurance works. I do have an umbrella policy to protect assests as part of my USAA account.

Providers? Recommendations? Thoughts? Pitfalls?
 
Check your umbrella policy. Lots of policies (umbrella, life, homeowner's) specifically exclude aviation activities and assets.

There are a number of insurance brokers around. Gallagher, Skysmith, etc. Find one and they will shop your business to the field of underwriters.
 
kyleb said:
Check your umbrella policy. Lots of policies (umbrella, life, homeowner's) specifically exclude aviation activities and assets.
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Yeah, that's one aspect. at 68, I'm into protecting the "nut" phase of life. She, who must be obeyed, insists. Just trying to gather all the experiences. Tnx.
 
I have no idea how you would finance a kit or airplane parts. Is that a thing? I thought you basically did homebuilts as lay-away, where you save up, buy a wing, build the wing, then save up to buy the other wing... after 10 years, you have an airplane. :D

Aircraft insurance is somewhat like classic car insurance. You pick a stated value. There is no "bluebook" adjustment, they either fix your plane when you bend it, or hand you a check for that amount. It's called "hull value".

There is no "price shopping" aircraft insurance either. Brokers will get quotes from the underwriters, it will be the same quote. Brokers all make their 15% commission. You differentiate brokers by their level of service, efficiency/turnaround time, those who shop ALL of the underwriters, and those will present your story when you are a difficult risk.

Since you are at a difficult to insure age, you will want to also shop the one insurance company that does not use brokers, Avemco, and include them in your quote process. I have no idea if Avemco does E-AB or not.

Good luck :)
 
Avemco does insure homebuilts. I found them competitive on liability, but more expensive for hull, at least for my Hatz. Great service, though. Right now I'm using Falcon/AIG.

Regarding "how to" , normally you fill out an application, with details on that specific aircraft (N-number), your pilot experience (total and recent hours in various categories), etc. If you don't have a specific aircraft, hopefully the agent can give you an estimate.

I don't know if one can finance a homebuilt, maybe a flying example of a common type like an RV. If it's possible at all it's pretty rare.
 
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If you can still get it, consider Avemco. Yes, it's more expensive, but once you are insured age by itself won't lose your insurance. With a broker, every year you sweat to see if you will be renewed.
 
Your umbrella policy is going exclude anything and every thing aviation related. Homeowners policies also exclude aircraft parts including an exp. kit project.
 
schmookeeg said:
I have no idea how you would finance a kit or airplane parts. Is that a thing?
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Sure, you can get a loan to buy a kit or airplane parts... AOPA can help, or check the ads in (online) Trade A Plane.

There is no "price shopping" aircraft insurance either. Brokers will get quotes from the underwriters, it will be the same quote.
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Not quite accurate... a good broker will solicit quotes from every underwriter that would consider you... that's the shopping part. Then, the broker will present the recommended bids, with an analysis of pluses and minuses (other than just price).

Paul
 
I had Avemco for a number of years. Last few years have been with https://air-pros.com/ and my experience has been first rate.

I'm a few years younger than the OP but tail wheel insurance in my EAB was more than reasonable.
 
Thanks, everyone. I hadn't even considered my age and insurance. Is that really a thing? I guess so.

Maybe the way to go is Personal Injury and Liability, eating the value of the hull in the case of a wreck. It would be painful, but not unbearable.

Mostly I just want to be responsible and insure against damage done to others (and to protect net wealth). When we spent a few years cruising the Caribbean and Med, we went with a smaller, older boat we could walk away from if it ended up on a reef. Otherwise, "hull" insurance was unaffordable to couple-cruisers, especially those who elected to stay in the zone during hurricane season (we'd haul out or shelter in Culebra).

Kinda giving up on the idea of financing, too. The only reason I considered it was because the market has been doing so well lately, and interest rates are so low. A bit loathed to cash in equities right now.
 
Another happy Air-Pros (Aviation Insurance Resources) customer here. Gregg Ellsworth is the agent I work with and has been great. Carrier is AIG. I'm 79, and for five years they've been the insurance agent for my experimental Zodiac. Private Pilot, 3,000 hours, no accidents, incidents, pilot deviations, or claims.
 
kyleb said:
Check your umbrella policy. Lots of policies (umbrella, life, homeowner's) specifically exclude aviation activities and assets.
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In fact, I have USAA's umbrella policy. It doesn't cover claims arising from my flying my plane. It does protect the assets from other liability claims that arise from other things (i.e., if I mow down someone with my car, USAA will keep them from taking my plane).

There are essentially two ways to go for insurance: a broker and one of the companies like Avemco that sells direct. Both have their advantages and disadvantages. One thing I'll specifically dissuade you from is using anybody AOPA recommends.

USAA does have an aviation broker, but unlike most stuff they do, their aviation side is really poor compared to some others.

Note that aviation policies differ a bit from what you're used to on a car. They're stated value policies (much like Hagerty writes for classic cars, etc...). Be careful to adequately cover your plane (and its avionics) if you are going to have hull coverage (what they call collision in cars). You can get bitten badly if you underinsured.
 
If you can't pay cash you cannot get on the ride.

Homebuilt failure rates rival student pilot drop out rates. Don't 'invest' $60k+ for that fast build kit only to have life happen and end up selling it for pennies on the dollar.

There are tons of cheap E/ABs out there to build...
 
pfarber said:
There are tons of cheap E/ABs out there to build...
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You may get a meaningful discount on a previously owned airframe kit, but most of those get abandoned/sold at the "man, these wings are a lot of work" stage. So you still have half an airframe to buy, the firewall forward, panel and paint. Ultimately, you might save yourself 10% of the cost of the whole shebang.

The market is pretty efficient.
 
You can always find a bad deal. I walked away from plenty of factory fast build kits that were half done but they still wanted $20k and and it still needs and engine and avionics and interior.

Finally found a deal for $3k (that's right, 1/10th of a factory hlaf assembled kit that will make me a few grand to finish.

Unless you are a proven national award winning builder your time is worth zero dollars to me, and the kit is worth slight more than the stock it was cut from.

Feel free to pay more,but don't ever say that there are not any good buys out there.

Most people who are ready to buy know exactly what they want and have cash to jump on a deal... If you are not at that stage then you are not ready to buy.
 
pfarber said:
You can always find a bad deal. I walked away from plenty of factory fast build kits that were half done but they still wanted $20k and and it still needs and engine and avionics and interior.

Finally found a deal for $3k (that's right, 1/10th of a factory hlaf assembled kit that will make me a few grand to finish.

Unless you are a proven national award winning builder your time is worth zero dollars to me, and the kit is worth slight more than the stock it was cut from.

Feel free to pay more,but don't ever say that there are not any good buys out there.

Most people who are ready to buy know exactly what they want and have cash to jump on a deal... If you are not at that stage then you are not ready to buy.
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Meh. I financed most of my kit. Would do so again in a heart beat. Cash only simply isn’t the only way to get in the game.

As for insurance I went through USAA/EAA with Falcon as the broker- They usually give me quotes from multiple underwriters with AIG being the cheapest for me the past 4 years running. In the RV world, Gallagher is a major Broker.
 
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There is a reason why 60% of households live paycheck to paycheck... A huge loan payment for a kit that has a high failure rate is only one reason. And what if your financed engine needs a major repair? Now you're making payments on a thing you can't even use.

It's bad advice to finance toys. If you think otherwise then you are gambling with your money. Smart people don't gamble with the rent/food money.
 
pfarber said:
There is a reason why 60% of households live paycheck to paycheck... A huge loan payment for a kit that has a high failure rate is only one reason. And what if your financed engine needs a major repair? Now you're making payments on a thing you can't even use.

It's bad advice to finance toys. If you think otherwise then you are gambling with your money. Smart people don't gamble with the rent/food money.
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I disagree. What's bad is to finance above your means. Debt itself isn't necessarily bad, even for toys. It's poor debt management that is bad. If you understand your cash flow and live within your means, and money is cheap, why not? All of us don't have cash for toys and personally I don't want to be my parents who by the time they had the cash they were too old to enjoy it. But there aren't absolutes and agree this strategy isn't for everyone. It worked for me though as I didn't have a spare $175K lying around to fund my build.

As for kits, I don't know anyone, at least in the RV world, that haven't basically gotten back what they spent when selling partial kits. Have some lost their shirts? I'm sure there are but the anecdotal evidence, again in the RV world, is that that's definitely the exception and not the rule. YMMV....
 
Debt in the form of bent aluminum is a bad idea. There is not a great resell market for E/ABs.

Of course everyone you know sells for a huge sum... I don't know of many that will brag about losing their shirt due to financial troubles.

It's not a smart idea to go into debt. Period.

Let me guess... You also predicted the covid downturn? No?
 
pfarber said:
. There is not a great resell market for E/AB
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Not in my experience. The market prices across the board would also disagree with you.

pfarber said:
Of course everyone you know sells for a huge sum... I don't know of many that will brag about losing their shirt due to financial troubles.
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OK Professor. Didn't say that. I just refute your assertion that everyone is taking a bath. The anecdotal evidence doesn't support your position IMO.

pfarber said:
It's not a smart idea to go into debt. Period.
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Again that's just your opinion. Just because you post it doesn't make it right or wrong. In a perfect world I'd agree with you but were talking the real word here so absolutes rarely apply. We're obviously just going to have to agree to disagree.
 
I think OP has a great handle on things. Debt/asset is about flexibility, math, risk. Fairly simple stuff. I financed my current truck, where I could have just purchased it. At 1.99%, why would I take a hit on investments? Now, if you're paying 73% interest on your living room set, because you can't afford a sofa and don't want to "settle" for a futon, then yeah, you might be bad at math. I don't think that applies to too many people flying aircraft, though.
 
Financing is not about paying the least amount of interest, but the risk of loss.

If your truck blows and engine can you put $5k into a repair? Because the bank will still want the payments.

As for selling E/ABs... Im gonna need to see some receipts of sale before I believe a rando on the internet.

Enjoy your debt. Enjoy being a slave.
 
pfarber said:
Financing is not about paying the least amount of interest, but the risk of loss.

If your truck blows and engine can you put $5k into a repair? Because the bank will still want the payments.

As for selling E/ABs... Im gonna need to see some receipts of sale before I believe a rando on the internet.

Enjoy your debt. Enjoy being a slave.
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:rollercoaster::rofl::rofl::lol::lol:
 
pfarber said:
Financing is not about paying the least amount of interest, but the risk of loss.

If your truck blows and engine can you put $5k into a repair? Because the bank will still want the payments.

As for selling E/ABs... Im gonna need to see some receipts of sale before I believe a rando on the internet.

Enjoy your debt. Enjoy being a slave.
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Just because you don’t understand it doesn’t mean it’s wrong. Many of your statements are demonstrably false, like eab resale being low. That one is particularly moronic.
 
There's a very strong resale market for some of the more popular E-AB models... RVs, Kitfox, Cub clones, a few others. Other models, not so much, and sellers of many older models struggle to get even a fraction of what they had into it. There are some great deals out there if you don't have to have the latest and greatest, and some really great deals if you are willing to do some work or don't need more than one seat.

Financing an experimental generally means an unsecured personal loan or a home equity loan. I'm generally in the "financing is a bad idea" camp, but I have borrowed to buy planes when cash flow was an issue and I knew I could pay it back within a year or two.
 
I've been following Glastar prices. They've gone from ~$50k to ~$120K in a few years.
Edit:
Late October, this year (2021) I saw a GlaStar listed for $52K.
 
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